In today’s briefing:
- WellNeo Sugar (2117) To Buy Toyo Sugar (2107) – Too Cheap, No Synergies Paid, but Too Small
- Yamaha Corp (7951) BIG Buyback May Be Followed By More Later
- A Partial Tender Offer of Englewood Lab by Cosmecca Korea
- Whirlpool of India OFS Early Look – Another Large Selldown by Parent
- Guming Holdings (Good Me) IPO Preview
- NIFTY50 Index Rebalance Preview: Adds Secure; Tight Among the Deletes
- Brainbees Solutions (FirstCry) – US$2bn IPO Lockup Expiry with Most Investors Still in the Money
- Mercari (4385) | Profitability on the Rise with More Levers to Pull
- Euro Pratik Sales Ltd Pre-IPO Tearsheet
- Cavco Industries: Expanding Financial Services Segment to Help Tilt The Competitive Dynamics In Its Favor!
WellNeo Sugar (2117) To Buy Toyo Sugar (2107) – Too Cheap, No Synergies Paid, but Too Small
- WellNeo Sugar (2117) today announced a deal to buy Toyo Sugar Refining (2107 JP) at a 27% premium. This is a small ¥11bn deal where insiders own 45%.
- Normally I wouldn’t even talk about a deal this small but this one has something going for it. Two things actually.
- And readers will have to read all the way down to the conclusions to find out the key one, but the setup is that it is too cheap.
Yamaha Corp (7951) BIG Buyback May Be Followed By More Later
- Yesterday, Yamaha Corp (7951 JP) announced Q3 earnings (results, presentation, metrics), a change in full-year guidance (revs unch’d, OP -10.8%, NP -25%), and a large buyback.
- 9M Revenue up yoy but China sales slower OP up yoy (audio business, SG&A cuts), but FY revised lower due to restructuring (impairment, retirement expenses). Looks worse than it is.
- The buyback is interesting, and large. And investors should be aware of the modalities.
A Partial Tender Offer of Englewood Lab by Cosmecca Korea
- On 6 February, Cosmecca Korea (241710 KS) launched a partial tender offer on Englewood Lab (950140 KS).
- Cosmecca Korea announced that it plans to purchase 11% (2.185 million) of Englewood Lab’s outstanding shares at the tender offer price of 10,000 won.
- It appears that this partial tender offer is an attempt by Cosmecca Korea to increase its stake in Englewood Lab even further, capitalizing on the lower share price.
Whirlpool of India OFS Early Look – Another Large Selldown by Parent
- Whirlpool Corp (WHR US) is looking to raise about INR 46bn (US$530m) from selling a stake of about 31% in Whirlpool of India Limited (WHIRL).
- In an announcement released on Jan 30, 2025, the firm mentioned its ultimate parent’s intention to sell down its interest in WHIRL from 51% to 20% by mid-to-late 2025.
- In this note, we talk about the past deal performance and other deal dynamics.
Guming Holdings (Good Me) IPO Preview
- Guming Holdings (1364 HK) (Good Me) is getting ready to complete its IPO on the Hong Kong Exchange in February.
- At the high end of the IPO price range, the listing will raise about HK$1.58 billion (US$220 million).
- Guming is a ready-to-drink beverage company specializing in freshly made tea beverages.
NIFTY50 Index Rebalance Preview: Adds Secure; Tight Among the Deletes
- Following their inclusion in the F&O segment in November, Zomato (ZOMATO IN) and Jio Financial Services (JIOFIN IN) appear to be sure-shot inclusions to the NIFTY Index in March.
- Bharat Petroleum Corp (BPCL IN) is a certain deletion from the index. Britannia Industries‘ average free-float market cap is less than 0.004% below Hero Motocorp‘s. It’s very close.
- Passive trackers need to trade between 3.7-11.8 days of ADV on the stocks. The impact increases significantly to between 8.4-21.8 days of delivery volume to trade on the stocks.
Brainbees Solutions (FirstCry) – US$2bn IPO Lockup Expiry with Most Investors Still in the Money
- BrainBees Solutions (FIRSTCRY IN) (FirstCry) raised around US$500m in its August 2024 India IPO. The lockup on its pre-IPO investors is set to expire soon.
- In India, FirstCry sells Mothers’, Babies’ and Kids’ products through its online platform, company-owned modern stores, franchisee-owned modern stores and general trade retail distribution.
- In this note, we will talk about the lockup dynamics and possible placement.
Mercari (4385) | Profitability on the Rise with More Levers to Pull
- Record Margins: Q2 OP surged 82% YoY to ¥7.1b, with Japan profitability up and losses narrowing in Fintech and the US.
- US Breakeven Play: Aggressive cost-cutting led to 12ppt margin improvement; if growth stalls, a sale or exit could boost margins by 200bps.
- Fintech Upside: Losses peaked last year, with 16ppt OPM improvement; breaking even could add 400bps to group margins.
Euro Pratik Sales Ltd Pre-IPO Tearsheet
- Euro Pratik Sales Ltd (7778885Z IN) (EPS) is looking to raise about US$100m in its upcoming India IPO. The bookrunners for the deal are Axis, Dam Capital.
- The company operates in the decorative wall panel and decorative laminates industry as a prominent seller and marketer of Decorative Wall Panels and Decorative Laminates.
- According to the Technopak Report, has established itself as one of the largest organized Wall Panel brands, with a market share of 15.87% by revenue.
Cavco Industries: Expanding Financial Services Segment to Help Tilt The Competitive Dynamics In Its Favor!
- Cavco Industries, Inc. reported strong third-quarter results for fiscal year 2025, underscored by a combination of improved performance in its financial services and factory-built housing segments.
- The company’s EPS rose significantly by 30% sequentially, reaching $6.90.
- Notably, the Financial Services segment recorded its strongest quarterly profit in four years, attributable to more effective underwriting, higher insurance premiums, and favorable weather conditions leading to lower claims.
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